Offering a retirement plan provides many different benefits for you and your business.
In the next few blog posts, we will take a look at different types of retirement plans, including Solo 401k, Simplified Employee Pension (SEP) IRA, Simple IRA, and traditional 401k plans. We’ll cover some of the features, costs, and considerations for each type of plan to help you decide which is best for you.
In this post, we are going to cover the three main reasons why you should have a retirement plan: maximizing retirement savings, tax benefits, and growing your small business.
Maximizing Retirement Savings
The major benefit of having a small business retirement plan is that it allows you to save more for retirement. The 2018 contribution limit for a traditional IRA (which is a personal retirement plan) is only $5,500 ($6,500 if you’re over 50 years old). The business retirement plans that we will cover in later posts have much higher limits.
The increased savings added into your business retirement plan will be invested and will grow either tax deferred or tax free. Check out our video to learn the difference between roth vs pre-tax.
Retirement may seem far away, but the key to reaching your goal is to start saving as early as possible.
The government incentivizes business owners to offer retirement plans by offering various tax savings. Contributions made by you to your employees’ accounts are tax deductible.
In most cases, the expenses for the plan are tax-deductible as well. You might also qualify for a $500 tax credit to offset startup costs.
Growing Your Small Business
In order for your business to grow, you need to hire and maintain top talent. Your employees are all working toward retirement, so they will consider how well you can help them reach their goal. Offering a good retirement plan could be the deciding factor in a person choosing your company over your competitor.
You can also structure your retirement plan in a way that incentivizes employees to work for your company for a long period of time. This will lower the overall cost spent on training new employees and will help strengthen your employee culture.
If you can attract valuable employees who are committed to your company long term, your business will surely experience more growth.
Retirement Plan Guide
Enter your information below to download our comprehensive guide on selecting a retirement plan. If you have additional questions or are ready to start your plan now, talk to one of our financial advisors to help you get started.